Mexico contributes over 3.5% of world auto output
MEXICONOW Staff Report
Guillermo Prieto, Executive President of the National Automotive Dealer Association (AMDA), has forecast sales of vehicles in Mexico this year of 1.2 million units.
And a leading industry analyst proclaimed that Mexico’s auto industry has a bright future, is definitely on the world auto industry’s radar and will continue to ascend in the Top 10 of the leading auto industry countries between 2015 and 2020.
Mr. Prieto, speaking recently at the Mexico Auto Industry Summit in Leon, Guanajuato, said Mexico contributed over 3.5 per cent of world car production in 2014 and that more than 80 per cent of its production went to foreign markets. He also pointed out that the country increased its share of production in North America by 12 per cent during the last 20 years.
On imported used cars, always a thorny issue for the Mexico auto industry, Mr. Prieto said: “We have to implement the environmental and physical-mechanical standards and regulate the importation of used cars. To encourage that, we must eliminate tenancy tax, encourage renewal programs and reduce the tax burden by ISAN (Tax levied on purchase of a new car).
“Since 2005 until the third quarter of 2014, we have accumulated 7,484,210 imported used vehicles. That is the equivalent of 77 per cent of the new vehicles sales in the same period of time. And as of September, 356,123 have been imported which is equivalent of 46.5 per cent of total new vehicle sales.”
On his forecast for sales of light vehicles, Mr. Prieto said there would be a slow start, with negative figures for the first time since 2009 although there would be progress in an integrated sector strategy to promote the domestic market. Generally speaking, he said, the Mexico auto industry would experience economic growth throughout 2015.
Guido Vildozo, Associate Director of IHS Automotive’s North America Auto Industry Research, also delivered an optimistic address at the Summit.
He said an increase in production and competition, as well as greater access to credit for financing purchases, will be important factors in sustaining increased Mexican purchases in the future.
Mr. Vildozo made several forecasts. Three of them claimed that in the future luxury vehicle manufacturing in Mexico will experience significant growth in coming years, annual Mexico production will reach five million light vehicles within the foreseeable future and Mexican sales volumes will be predominantly tied to the conditions prevalent in the US market.
Mr. Vildozo said: “World auto sales are on a roll because of the US and European economic recovery and continued growth in China. The importance of emerging nations will continue to grow.”
“In Mexico, there is more growth to come. More manufacturing will bring new highs and Nissan, GM and VW will face increasing competition from the likes of Mazda, Mitsubishi, Toyota and Honda, among others.
“Future sales levels will outpace production by less than 7 per cent and the positive sales trajectory will peak in 2017. Exports will bolster light vehicle production and more than 40 Free Trade Agreements will drive Mexican output.”
“Mexico is definitely on the industry’s radar and will continue to ascent in the Top 10 during 2015 to 2020. It wouldn’t surprise me if Mexico builds more cars than Brazil during that period.
“Global growth will be driven by TRIAD as opposed to emerging markets, the US will have another solid year, back to business as usual, and I would expect that the Q1-2015 Mexican sales figures could herald the market potential.”
“Used car imports should hold momentum, SUVs will diversify into a wave of B-SUVs, the luxury car segment will be key and NAFTA production will see more investment, particularly due to localization.”
“And, finally, Mexican production will hit the 3 million mark, quickly rising to 5 million, and, as ever, the Mexico auto industry will continue to rely heavily on the US market.”